Unless you’ve been hiding under a rock for the past month or so, you’ll have likely seen various news reports suggesting that Netflix is in a spot of bother. It’s hard to believe that the King of Streamers may be beginning to let it’s crown slip, but if you’re not watching your competition like a hawk, they’ll catch the worms.

The latest data shows the greatest decline in Netflix subscriber growth for over a decade. Although the giant gained close to 40 million new members in the height of the pandemic, their Q1:2022 predictions estimate a mere 2.5 million new subscribers (reference: Digital TV Europe).

But why exactly is the Mighty falling?

It’s a combination of factors, one of which we are highly qualified to dive into. Post-Covid churn and a pandemic-delayed content slate is hurting their growth. Especially when you release a whole season at once, the extreme pressure to keep churning and burning through content is immense…and expensive! Netflix is expected to spend more than $17bn on content this year, an increase of 25% in comparison to last year. But even then, although Netflix releases hot new shows on a regular basis, new data suggests that Netflix Originals quickly lose their steam after their first month of release (reference: Variety).They’ve had to therefore hike their prices, and this increase is making them the priciest offering in an extremely crowded market. In the US they’ve already signed up all the low hanging fruit, and now it’s harder to convert the last converts. And finally (our turf), they’re just not promoting themselves well enough in comparison to their competition.

There’s no denying that Netflix promotion remains strong on MVPDs and Games Consoles. On the likes of Cox, Sky Q and Xfinity their branded content continues to dominate the storefront, and on Xbox and Playstation they continue to snatch up the highest dedicated rows on a weekly basis. Their branded artwork on these platforms makes it impossible for users to miss, as they appear to be the only streaming company including their logo within their Title artwork. Whilst they appear strong on Amazon Fire, on two of the most popular OEM devices – Apple TV and Google TV – Netflix gets lost behind their competitors and others Apps, and in some cases doesn’t feature at all.

Last year, Netflix used to consistently feature in a prominent position within the ‘Now Streaming’ banner on Apple TV, but this year they’ve failed to feature in any True Above the Fold (Home Screen to you and me) placements at all. As for Google TV, Netflix has pulled their integration entirely, for reasons still widely unknown, but if the fears are over Google getting their hands on their precious data, then Netflix need to realise that they’re not alone in the market anymore. Their 20+ competitors are not as guarded with their data, and this in turn will allow them to keep earning placements and Share of Voice.

There is also no doubt that heightened competition from rival streaming platforms like Disney+ and Amazon Prime has added to Netflix’s problems. These competitors often secure amazing merchandising placements, including dedicated rows and Home Screen take-overs, ensuring users can see their content no matter where they are. On the back of this (and the dramatic decrease in their new subscriber base), Netflix’s share price tanked, whilst their competitors are showing significant growth. This just goes to show that you could spend millions of dollars on content, but if you’re not taking advantage of all promotional areas across all UIs, then there really isn’t much point…

So what can Netflix do to get their head back in the game?

Many streamers are now aiming high, planning for a mass roll-out into up to 200 countries. Some will have to stop before they reach 50, due to diminishing returns, while many others will simply be looking to get their App on any storefront. Netflix though is already on over 2,000 devices globally, so they need a real-time overview of the platforms and devices that they’re App is on, as well as the content placements that they’re gaining relative to their competition.

Whilst Netflix may have their own analytics and in-house solutions to tell them how their content is performing across the digital storefronts, it’s highly unlikely they’ll have the same data on their rivals. How can they truly understand the value of their Earned Vs Paid Media placements if they don’t have data on their competition’s relative shelf space? The P&L Owner at Netflix will want to track on a weekly basis the worth of their promotions on each platform, and evaluate what’s changed. What merchandising opportunities have the competition been taking advantage of that Netflix hasn’t?

Gaining relative shelf space

Visibility of where their App is on the shelf is one thing, but Netflix needs more intel on how they can get more shelf space. Shelves across the digital platforms are different – Apple TV’s UI is different to LG’s – so it’s vital that Netflix is able to set up individual strategies to promote their App on an Apple TV Vs a Samsung TV, in the US Vs Japan. It’s become evident that Netflix isn’t making the most of promotional opportunities across a whole host of platforms, and their competitors are starting to make up this ground.

Netflix also needs a better plan for releasing their new Originals. They’ll obviously want to make sure they get the widest distribution possible, and therefore the biggest bang for their buck. Which rails on Apple TV drive maximum downloads and views Vs an Xbox for example? This kind of data would be invaluable to Netflix Account Managers in terms of negotiating placements with their platform partners, but also to their Analytics teams in terms of inputting the data, along with their performance data, into their own BI systems to better understand what drives new subscriptions.

It’s anyone’s game to win at the moment, but the question remains whether Netflix can stave off it’s fast-growing competition and retain it’s hard-earned crown. Watch this space…